The Cato Institute seeks to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets and peace. Toward that goal, the Institute strives to achieve greater involvement of the intelligent, concerned lay public in questions of policy and the proper role of government.

Other than maybe the highly voluble William Bennett, Ronald
Reagan’s second education chief (who still has a radio show),
it is difficult to think of a U.S. Secretary of Education who has
garnered as much attention as Betsy DeVos. But not in a good way.
As exemplified by her much-lambasted interview on “60
Minutes” recently, from basically the day her nomination was
announced she has been condemned as dangerous and unprepared for
the job.

And it can be difficult to disagree with the latter. Perhaps,
that is, unless you think the job should not exist.

Would it be useful for advancing the things Mrs. DeVos seems to
stand for — more choice and less federal interference —
if she could articulately and forcefully defend them? Absolutely,
and in this regard Mrs. DeVos leaves much to be desired. She is not
as utterly bumbling as many of her most vociferous — and
perhaps politicized — detractors proclaim, but she needs to
have clear, forceful answers ready. Alas, she too often
doesn’t.

In a way, Mrs. DeVos
represents what the public seems to want, and the Constitution, at
a minimum, demands: a humble, hands-off Washington.

For instance, Mrs. DeVos was right to point out in her “60
Minutes” interview that research in Florida has found that
the presence of private school-choice programs appears to drive
public schools to improve, but she needed to know what to say when
challenged on the effect of choice in Michigan. There, research has
shown that choice in the form of charter schools works, but it is
arguably the least friendly state to private school choice —
its constitution is the only one to specifically prohibit even tax
credits for choice — and we should all recognize that schools
only have so much impact on test scores. Lots of other factors do,
too.

That said, if you believe that the federal government should
have little if any role in education — if you’ve read
the U.S. Constitution and know that governing in education is not
among its few and only powers — then something might actually
seem a bit right about Mrs. DeVos‘ somewhat humble, tentative
approach to pronouncing on policy. Again, if her position is that
Washington should not be involved in education she should state
that with conviction, citation of the Constitution, and immediate
reference to evidence of federal failure. But there is also
something refreshing about a bit of humility.

Even believers in a strong federal role in education will admit
that Washington only supplies around 10 percent of total K-12
funding. Isn’t it then a bit much to have an education
secretary pronouncing that he or she knows best what all children
need? And isn’t it even worse when they end up dictating to
the country’s schools in exchange for that relatively small
pot of money the feds supply?

For people who think that Washington should have appreciable
control over education, it is, of course, easy to understand their
worry about an education secretary who doesn’t seem to have total
command over all the issues. If government is to run education,
you’d better have a brilliant person running government.

But that model seems to have produced pretty weak results. Mrs.
DeVos was right to point out in her pilloried interview that we’ve
seen test-score stagnation, at least as measured by high school
seniors, in the decades of increasing federal control. And with the
Every Student Succeeds Act, passed in late 2015, Congress rejected
federal control as delivered through the No Child Left Behind Act,
Race to the Top, and as symbolized by the federally coerced Common
Core national curriculum standards.

Why did Congress reject federal education management? Not just
because it did not appear to work, but because the American people
rejected it. They were exhausted by Washington’s masters of the
universe — or of the classroom — telling them what
education was all about, whether their schools were any good, and
imposing policies under the constant threat of withholding money
taxpayers had no choice but to send to D.C.

In a way, Mrs. DeVos represents what the public seems to want,
and the Constitution, at a minimum, demands: a humble, hands-off
Washington.

Neal
McCluskey is director of the Cato Institute’s Center for
Educational Freedom.

If 2016 marked the arrival of “fake
news”—widely disseminated false news
stories—recent events have made clear that the threat is here
to stay. Recent European elections, including last week’s Italian elections, have been
rocked by patently untrue stories. A slew of similarly fabricated
stories is sure to hit U.S. shores ahead of the 2018 elections.
Some will come from malevolent foreign actors with political
motives. Others will come from shadowy companies just trying to
make a buck. Still others will come from trolls who delight in
mischief-making.

Whatever their origin, there’s no doubt that fake news is
a serious problem. But all hope is not lost. It turns out that
there’s a simple way to get people to disbelieve the fake
news they encounter: Tell them the truth. Our research, forthcoming at the Journal of Experimental
Political Science, makes clear that everyday people,
across the ideological spectrum, are willing to reject fake news
and accept a factual correction. When people who see a fake news
story are told that the story they’ve read is plainly wrong,
they reject the fake news story.

Indeed, this is even true when a fake story aligns with one’s
political beliefs. If you’re a conservative and you’re told that a
fake story flattering to conservatives was actually fabricated,
you’ll likely respond by conceding that the story is fake. The same
is true for liberals and independents. However, there’s one thing
that proof of fake news won’t do—get people to change their
political convictions.

mericans care about their
political parties, and they hold tightly to their political
beliefs. But they also like being accurate.

Here’s how our study worked. We recruited people to take a
survey and randomly assigned them to read a fake news story. All
the fake stories were taken from real life, and selected across the
political spectrum. Some were of recent vintage, such as the 2016
“Pizzagate” story, which claimed Democratic operatives
were operating a secret ring of pedophiles in a D.C.-area pizza
parlor. Others were older, such as allegations that President Obama
was not born in the United States.

We even took stories initially reported by mainstream news
outlets that were later revealed to be entirely inaccurate, such as
The Washington Post’s claim that the Russians had
infiltrated Vermont’s power grid. And we looked at fake
stories bubbling among conservative websites that credit President
Trump for false accomplishments, such as a crackdown on sex
trafficking.

After reading their story, some subjects were randomly assigned
to read a correction. This allows us to measure changes in opinion
over and above background knowledge of these stories. For example,
to correct The Washington Post’s story, we relied on
that newspaper’s own lengthy correction. To correct false
claims about Obama’s birth, we simply showed people a
replication of his birth announcement in a Hawaiian newspaper.

We then asked everyone to rate their level of agreement with the
claim advanced by the fake story. We compared those who were
randomly assigned to read a correction to those who were not,
helping us discern whether the correction moved the needle and
changed readers’ minds.

As it turned out, the average respondent was responsive to the
correction, no matter their political beliefs. For every fake
story, the average liberal, moderate, and conservative responded to
the factual correction by rejecting the fake news. Of course, in
some cases liberals were less enthusiastic about rejecting fake
news stories that favored their side’s interest. In some cases,
conservatives did the same. But in no case did we observe average
survey participants—or even ideologically motivated
respondents—rejecting the correction.

If you’re concerned about the spread of fake news, we have
a few recommendations. First, tell the truth. If you encounter
someone spreading fake stories, don’t shy away from reporting
the facts in response. Whether it’s your racist uncle or a
long-lost friend from high school, our results indicate that
they’ll probably be willing to accept the facts. That is
likely to be the case even if they’re coming from the other
end of the ideological spectrum. Relatedly, when you rebut fake
news, try to rely on non-partisan sources like Snopes.com.
In your rebuttal, get to the point, and leave the partisan attacks
for another time.

But be realistic about the consequences. As two of us have made clear in other research,
you should not expect that telling people the truth will cause them
to actually change their views about politics. While people are
content to concede that a fake story is indeed fake, they are far
less willing to part with the political principles they hold dear.
A factual correction probably won’t change one’s
preferred party, candidate or policies.

If you voted for Clinton in 2016 and aren’t sure why Trump
voters don’t seem to care if Trump lies or if stories about
Trump prove to be fake, consider the following hypothetical. If a
pro-Clinton fake news story had circulated during the 2016
election, and you came to learn that it was fake, would you accept
the facts? We think you would. But would a correction to one
pro-Clinton fake story cause you to switch your vote, or even
temper your enthusiasm for her compared to Trump? To put it mildly,
we’re skeptical.

Americans care about their political parties, and they hold
tightly to their political beliefs. But they also like being
accurate. Our study suggests that there’s no reason to leave
fact-checking just to those in the fact-checking business. We can
all play our part, and confront untruths wherever we may find them.
Of course, we’ve got our work cut out for us. Even as late as last year, more than one-third of all
Americans believed Obama was born in Kenya, and 28 percent of
citizens were at least willing to entertain the possibility that
“Pizzagate” was real. But throwing up our hands in
despair isn’t the answer. Doing the hard work of
truth-telling—and setting our expectations
appropriately—is all of our responsibility.

David Kirby
is an adjunct scholar at the Cato Institute. Thomas Wood is an
assistant professor at Ohio State University

Economists believe taxes can be designed to ensure prices
reflect the social costs of activities such as alcohol consumption
and smoking. But politicians all too often use the veneer of
economic reasoning to justify nannying levies that won’t work
or ignore damaging unintended consequences.

An example of this partial thinking arose this week when
former
chancellor George Osborne declared that the sugary drinks levy he
introduced was “more effective than hoped”. His
evidence was Office for Budget Responsibility analysis that
producers are substituting sweeteners for sugar in their
drinks’ recipes more quickly than expected to avoid the
tax’s introduction in April. “That means less sugar and
better health,” Osborne concluded confidently on Twitter.

Not so fast, George. The tax was designed to reduce obesity, and
doing so should be the metric of its success. When he introduced
the charge, Osborne believed it would work by encouraging companies
to reformulate products to avoid it, increasing prices for
remaining sugary drinks to deter consumption, and using the revenue
— then expected to be £520m per annum — to fund school
sports and other anti-obesity efforts.

That one of these mechanisms has proven stronger than predicted
clearly tells us nothing about the overall impact of the
policy.

Combined with the company changes to avoid the levy, these
revenue shortfalls mean other taxes need to be raised to fund
anti-obesity programmes or else they will not happen. Who knows
whether the reformulated drinks or fewer funds for other programmes
will have a bigger effect?

Taxing sugary drinks alone was always too narrow to have any
significant impact. Campaigners justified the charge on the basis
that the biggest source of sugar in children’s diets is soft
drinks. But more of this comes from fruit juice (which is exempted)
than sugar-sweetened drinks for small children. For adults, sugary
drinks make up less than 2.5pc of our overall calorie consumption
— a drop in the dietary ocean.

As the Institute of Economic Affairs’ lifestyle economist
Christopher Snowdon never tires of saying, there is no evidence
linking sugary drink consumption and overall obesity rates. The
latter increased at a time when sugar sweetened drink consumption
was falling. There is likewise no cross-country international
correlation to suggest a link between the two. And this is not
surprising, given there are so many other factors that determine
how fat we are.

Even if we accept the role of sugary drinks on obesity, in order
for the tax to reduce it, consumption of sugary drinks would have
to fall, without people substituting exempted products also bad for
their health. Yet evidence from around the world suggests that
customers are relatively unresponsive to price increases for
popular brands, such as Coca-Cola, and do substitute away to
high-calorie alternatives (such as milkshakes) when the price is
prohibitive. Again, the impact of the tax on obesity is smaller
still.

This makes the business decision to reformulate by UK brands such as Ribena, Irn-Bru and Lucozade
all the more interesting. They have wagered their bottom line will
be less impacted by consumers potentially disliking their new taste
than by having to face the tax itself. Yet if the reactions on
Twitter to their new formulations are anything to go by, this is a
gamble indeed. It is still perfectly possible they have misjudged
their response and will have to readjust their recipes, or else
face losing customers to rivals such as Coca-Cola, or other substitutes, who
either stick to their guns or are unaffected.

In short then, it is far too early to judge Osborne’s sugar tax
a “success”. Reformulation is one mechanism through which
the tax could reduce sugar intake, with a marginal impact on
obesity. But without considering sales of other products, or the
impact of lost revenues on the anti-obesity program funding, we
cannot draw any firm conclusions at all.

Sadly, the tendency to declare victory early with sin taxes is
common. News that thin plastic bag use fell by between 75 and 90pc
at major UK supermarkets following the plastic bag tax introduction is widely
heralded as a slam-dunk policy success.

Yet economists never doubted use would fall significantly. The
trade-off was always about the overall environmental and economic
impact, given that substitute bags tend to be more energy-intensive
to produce, likely to have a greater landfill impact and worsen
food-associated hygiene. Without long-term data on these issues,
and some way of weighing them against each other, it would be
premature again to claim success.

Remember that too as calls for single-use plastic taxes amplify.
Even the Green Alliance has warned that major action could have
unintended consequences, such as increasing global carbon emissions
if it causes more agricultural waste, or leading to more
deforestation if it encourages paper-based packaging instead.

It’s not surprising that politicians reach for statistics to
claim their policies are working, of course. But good economic
analysis goes beyond direct effects, considering both the welfare
on customers and other consequences in related markets.

Before we rush headlong into more nannying interventions,
emboldened by recent forays, we would do well to remember that.

Ryan Bourne
holds the R Evan Scharf chair for the public understanding of
economics at the Cato Institute

Needle exchange programs have a more than 30-year track record
of reducing the spread of deadly diseases associated with IV drug
use while helping addicts get needed treatment. Arizona needs them,
as does the rest of the country.

Recently the House of Representatives unanimously approved a
bill to legalize needle exchange programs in the state. It is now
in the Senate for debate.

Needle exchange programs
have a more than 30-year track record of reducing the spread of
deadly diseases associated with IV drug use while helping addicts
get needed treatment.

Even though there are seven functioning needle exchange programs
in Arizona, they technically are illegal because of laws that
expressly prohibit the sale or distribution of drug paraphernalia.
So they operate under the radar. The bill, sponsored by Rep. Thomas
Rivera, R-Peoria, would add Arizona to the 30 states that
explicitly permit needle exchange programs, and five states that
have no laws prohibiting them.

Needle exchange programs have existed since the 1980s.
Originally developed in the Netherlands in the 1970s, they operate
throughout the developed world. The oldest continuing program in
the U.S. started in Tacoma, Wash., in 1988. As of 2012, needle
exchange programs were operating in at least 35 states.

The idea behind them is to prevent the spread of HIV and
hepatitis that often results from the sharing of dirty needles.
Seven federally funded studies between 1991 and 1997 showed these
programs reduce the spread of HIV. A 2013 systematic review by the
Centers for Disease Control and Prevention showed a drop in HIV and
hepatitis C infections associated with the exchange programs, which
was further supported by a 2014 meta-analysis.

Needle exchange programs are endorsed by both the CDC and the
Substance Abuse and Mental Health Services Administration, which
supports needle exchange programs for their “efficacy and
facilitating entry into treatment for intravenous drug users and
thereby reducing illicit drug use.

Law enforcement officers often get stuck with dirty needles, and
many believe needle exchange programs will reduce the risk of
exposure to disease.

Many needle exchange programs have personnel who counsel addicts
and get them help for their disease by referring them to therapy
programs. Some even offer testing for HIV and hepatitis, and
several also provide male and female condoms, as well as bleach and
alcohol (to clean paraphernalia).

But nearly 100 years since the total ban of heroin, and a
half-century since President Richard Nixon declared a “war on
drugs,” heroin is cheaper and more abundant than ever. In fact, in
2015 the CDC director noted heroin sold for one-fifth the street
price of prescription opioids. In 2016, deaths from opioid
overdoses, led primarily by heroin and fentanyl, climbed 20
percent.

Last June Gov. Doug Ducey declared the opioid overdose problem a
statewide emergency. The governor and lawmakers are right to be
alarmed. In recent years, intravenous heroin and fentanyl have
become the opioid abusers’ drugs of choice. If they hope to make a
difference, state leaders need to change their failing strategy.
The focus should shift to lowering the death rate and reducing the
spread of deadly diseases.

Legalizing needle exchange programs is a step in the right
direction.

Jeffrey A.
Singer practices general surgery in Phoenix, and is a senior
fellow at the Cato Institute.

Before sentencing notorious pharmaceutical executive Martin
Shkreli to seven years in prison, the federal judge presiding over
his criminal trial ordered him to turn over “Once Upon a Time in
Shaolin,” the Wu-Tang Clan album of which only a single copy
exists. Shkreli paid $2 million for the album, an extravagance he
could afford after making a fortune by jacking up the prices of
prescription medications.

Seizing the album and other assets worth a total of $7.4 million
may seem like karma, but it will do nothing to tame drug costs.
Indeed, it is entirely legal to raise generic drug prices (which
explains why Shkreli was convicted of securities fraud, not
healthcare fraud). The problem is that government has made it far
too easy for pharma companies to gain a national monopoly on the
supply of drugs that no longer are patent-protected. Rather than
make an example of Shkreli, the solution to outrageous drug prices
is to embrace globalization.

Competition doesn’t
always bring drug prices down as much as one might hope, but it is
still the best remedy for price gouging.

Shkreli first used this supply-control tactic at a company
called Retrophin,where he raised the price of Thiola,
a drug used to treat kidney stones, from $1.50 per pill to $30. He
did it again at Turing Pharmaceuticals, where he increased the
price of Daraprim, a 62-year-old treatment for a parasitic
infection, from $13.50 a pill to $750.

Collusion between drug companies explains some of these price
increases. In these cases, it’s up to the U.S. antitrust
authorities to protect consumers. But leaving collusion aside,
Shkreli and his “pharma bro” ilk avoid competitors in part because
of the costly and time-consuming process of obtaining approval from
the FDA to manufacture and distribute generic drugs. If the market
is small enough, potential competitors may not think it worth the
effort.

To fix this problem, Congress should allow companies that have
been approved to sell drugs or medical devices in other developed
countries to export those same drugs to the U.S. Many first-world
countries have strong regulatory structures and are devoted to
protecting their citizens from harmful products; the FDA should
grant automatic approvals to companies that satisfy the standards
in those countries. Competition doesn’t always bring drug prices
down as much as one might hope, but it is still the best remedy for
price gouging.

Consider Deflazacort, a treatment for a form of muscular
dystrophy. The drug has long been available as a generic in Europe,
where it costs about $1,200 a year. But it wasn’t legally available
in the U.S. until 2017, when the FDA approved Marathon
Pharmaceuticals’ application to sell Deflazacort here. Marathon’s
chief executive, Jeffrey Aronin, announced that it would charge
$89,000 for a year’s supply. Marathon ultimately backed down after public outcry
— but it never could have gouged American patients if the
companies that market Deflazacort in Europe were free to sell it
here.

Legislation that would grant reciprocal drug and device
approvals with other countries has been introduced in Congress
repeatedly, with support from both parties. To date, these bills
have gone nowhere. But President Trump has pledged to bring drug
prices down, and Alex Azar, the new secretary of the Department of
Health and Human Services, is advocating major changes to make
healthcare more affordable. Drug approval reciprocity belongs at
the top of the list.

Until that happens, what can consumers do to protect themselves
from price gouging? Although U.S. law formally prohibits importing
prescription drugs, tens of millions of Americans have saved
billions of dollars by doing so. They bring drugs home from trips
to Mexico and Canada, and they order them online from pharmacies
abroad. These practices already are too widespread for customs
agents to police. As more people follow suit, the likelihood of a
federal crackdown will become even more remote. Congress, sensing
the futility of trying to stem the tide, finally may move forward
with legislation authorizing automatic reciprocal approvals.

Then, instead of having to shop abroad, Americans will find less
expensive drugs - from manufacturers that sell in Europe, Australia
and other countries with standards like our own - at their local
drugstore. And that’s when the pharma bros’ stranglehold on drug
prices will finally be broken.

David A. Hyman
is an adjunct scholar at the Cato Institute and a professor at the
Georgetown University Law Center. Their upcoming book,
“Overcharged: Why Americans Pay Too Much for Health Care,” will be
released this summer. Charles Silver is a law professor at the
University of Texas at Austin.

Energy, minerals, and metals are indispensable for our American
standard of living. But unlike the case with energy, the U.S. is
chronically import-reliant on other nations for the minerals and
metals that are needed for our country’s economy,
infrastructure, and military. Mineral imports have steadily
increased for at least the past two decades because draconian
permitting requirements and environmental opposition have made it
hard to supply those needs from sources within the U.S. Now there
is not enough domestic mining to meet robust manufacturing
demand.

However, the real problem is that more and more mineral imports
are coming from China, Russia, and third-world dictatorships. The
nation’s vulnerability to a mineral embargo has become
sufficiently serious that President Trump issued an Executive Order (EO) on December 20, 2017, to
ensure secure and reliable supplies of critical minerals for the
nation.

For the first time, a presidential EO puts forth an official
government definition of what a “critical mineral” is,
along with its role in the economy: “a non-fuel mineral
material essential to the economic and national security of the
U.S.; the supply chain of which is vulnerable to disruption; and
that serves an essential function in the manufacturing of a
product, the absence of which would have significant consequences
for our economy or our national security.”

This new definition enables federal agencies and others to focus
on how serious the issue of critical mineral imports has become
from an economic, geological, technological, and manufacturing
standpoint.

Domestic mining could
supply most of our mineral needs, if only environmentalists would
allow it.

In response to the president’s EO, the U.S. Geological
Survey (USGS) last week published a list of 35 “critical minerals” that
are important for American economic health and military readiness.
The draft list includes aluminum, platinum, rare-earth elements,
tin, titanium, and over two dozen other critical minerals and
metals. These are the minerals that will be required to sustain our
standard of living and begin rebuilding the American
infrastructure, as proposed by the president.

According to the USGS, as of 2017, the U.S. is importing an
alarming 64 minerals and metals in quantities above 25
percent. Of those 64, approximately 35 are imported in various
quantities from China, and 10 from Russia. Put another way, we are
importing approximately two-thirds of these 64 key minerals from
adversaries.

Worse, the U.S. is 100 percent dependent on imports for 21
minerals and metals now listed as “critical minerals”
by the USGS, with more than half of those imported from China. If
the 15 rare earths were counted as individual metals, the number of
minerals and metals imported at 100 percent would jump from 21 to
35.

The problem is definitely not a shortage of domestic mineral
sources. In fact, the U.S. is well endowed with mineral resources,
according to numerous reports by the USGS. The nation was much more
mineral self-sufficient in the 1990s, when it led the world in
mining output. Since then, however, the U.S. has lost much of its
capacity to mine, refine, smelt, or process critical minerals and
metals because of a broad anti-mining agenda among many of the more
militant environmental groups.

Ironically and unfortunately, “greens” oppose many
mineral-resource policies that would actually facilitate
environmentally beneficial outcomes, such as renewable energy. For
example, the average wind turbine requires over three and a half
tons of copper to generate and transmit electricity. The typical
thin-film solar panel requires rare metals, such as indium and
tellurium, to convert the sun’s rays to electricity. Most
hybrid gas-electric vehicles use magnets that include quantities of
the rare-earth metals dysprosium and neodymium, while electric
vehicles need reliable supplies of lithium, cobalt, nickel, ‎and
rare-earth elements to produce smaller, lighter, and more powerful
batteries.

The rising price of these metals due to restricted supplies by
exporters could mean higher prices for Teslas and Volts, inducing
cost-conscious American consumers to feel more comfortable behind
the wheel of cheaper gasoline-powered autos. A further irony is
that China is steadily racing ahead of the U.S. on green-energy
technology — while at the same time Beijing is rapidly
building dozens of coal-fired plants across the country to power
its industrial and manufacturing base.

Despite these trends, environmental groups continue to impede
“green progress” in their unyielding stand against
mining for metals and rare-earth minerals that are widely
distributed in the mountain states of the American West and Alaska.
This de facto moratorium on mining has perpetuated our very
unhealthy dependence on China, Russia, and several dictatorships.
For example, surging battery demand for electronics and electric
vehicles may lead to sudden and unexpected shortages of cobalt,
lithium, and copper.

Many if not most of these mineral-import vulnerabilities are
avoidable. The U.S. sits on a vast treasure of mineral resources
and reserves that are probably more extensive than those of China
and Russia combined. The National Mining Association estimates
there is in excess of $6 trillion worth of minerals and metals
beneath our feet.

Based on USGS reporting, the amount of minerals just on
federal lands — America’s mineral endowment, owned by
the people — is beyond our imagination. Numbers cannot be
assigned to our mineral wealth yet because geologic mapping of
these lands, as a first step toward exploration and evaluation of
mineral deposits, is lagging. This is partly because of the
vastness of federal lands, but also due to poor federal stewardship
policies that restrict exploration in areas of known mineral
deposits. However, in what could be a huge turnaround for reducing
dangerous mineral imports through responsible mining, the
president’s EO states that it “shall be the policy of
the U.S. to identify new domestic sources of critical minerals, and
increase their exploration, mining, concentration, separation,
alloying, recycling, and reprocessing; and streamline permitting
for creating mines — for the benefit of the American people
and in an environmentally acceptable manner.”

This EO commits the country to reducing its vulnerability from
mineral-import overreliance while paving the way for a cleaner and
safer planet through existing and new technologies used by
America’s mining industry. Increased domestic mining of
abundant mineral resources is absolutely necessary for the economic
health of our nation and is a long overdue America First
strategy.

Ned Mamula is a
geologist and adjunct scholar in geosciences at the Center for the
Study of Science at the Cato Institute. Stephen Moore is an
American economic writer and policy analyst.

Austin, Texas — I went to South by Southwest for the first
time since 2002. My how times have changed.

Back then, I was a law student on spring break, looking for a
good time and finding it at this quaint little music festival that
had just started gaining national acclaim. Sixteen years later, as
a grizzled policy wonk with a newborn and a toddler at home, I was
looking for sleep more than diversion. This was a business trip
— I was there to speak at a First Amendment event organized
by the Newseum Foundation — and any entertainment was mere
happenstance.

Luckily, SXSW delivered again, with a disorienting mix of trendy
tech panels and sweaty queues to nowhere. The music festival
didn’t even start till after I returned to the real
world.

Luckily, the festival
delivered again, with a disorienting mix of trendy tech panels and
sweaty queues to nowhere.

But apparently I wasn’t the target demographic. It’s
not that “South by” doesn’t necessarily cater to
40-year-olds specializing in constitutional law and dad jokes, but
that it’s a “safe space for the resistance.” Indeed,
there was even an avant-garde music/art program incorporating yarn
and wires into something called “Conductors and
Resistance.” (Get it?)

In other words, I had somehow stumbled into Davos for the
hipster set.

“Artificial intelligence, blockchain technology, and the
ever-more-fraught relationship between platform and publisher felt
like some of the other themes du jour, but,” that Vanity Fair write-up described in an
on-the-nose summary, “much of the buzz revolved around Donald
Trump.” And not just the president himself, but an alternate
universe where trust-fund babies compete with would-be Keith
Olbermann go-fers for a place on Al Gore’s latest
cross-platform startup.

Just look at some of the presentations on offer: Let’s
Tech the Borders Down, Return on Inclusion: Investing in Diverse
Startups, The Authoritarian Playbook, Diversity and Inclusion in
the Sports Industry, RompHims and Boyfriend Jeans: Ungendering
Fashion, Why Ethereum Is Goint to Change the World, and of course
Jake Tapper’s interview of Bernie Sanders. (Not to be
confused with the Bernie Sanders impersonator — not Larry
David — who conducted a town hall.) And that’s just the
first day!

I actually attended the CNN opening-night party referenced in
the aforelinked piece. It was crowded and the apple old fashioneds
were too sweet. I missed Dan Rather and David Axelrod — at
least Brian Stelter attended my panel — but you’ll
excuse me for skipping a return visit to that venue for Axe’s
interview of Jon Lovett the next morning in order to work out.

By the time I got to the New York Times party, it was
late and there was a long line even for those of us “on the
list.” So I just went to Sixth Street and got my fill of
non-SXSW music — even if it wasn’t quite as good as my
last Nashville trip, when I discovered the incomparable Eskimo
Brothers while honky-tonkin’ down Broadway.

The next morning, Fox Sports House — which had taken over
the Hangar Lounge (across the street from CNN’s base at The
Market & Tap Room) — featured international fare in a nod
to the network’s upcoming World Cup coverage. It turns out
that kimchi tacos and Hoegaarden go surprisingly well together, but
the boisterous mood was spoiled by programming that built on the
previous day’s wokeness. I now know that my personal hell is
listening to three appropriately diverse and gendered humyns
stringing together buzzwords from the digital and corporate worlds.
It makes one wistful for a discussion of firearms policy with Beto O’Rourke.

The highlight of my visit was undoubtedly local radio
personality Dave Hill’s interview of Dick Cavett, the
comedian and talk-show host. Cavett’s heyday was long before
mine, but hearing a legend tell stories that would’ve gotten
him twitter-mobbed today made all the inanity worth traversing.

On the other hand, someone who’d never be ratioed is the
judiciary’s “Twitter laureate,” Fifth Circuit
Judge Don Willett, with whom I lunched across from the convention
center. Willett only recently moved a few blocks from the state
supreme court — his handle remains @JusticeWillett, which
perhaps will be apt again in future — and is still settling
into his new digs. Here’s hoping that the tweetin’
judge returns to his normal digital activities once he takes his
new colleagues’ temperature.

In sum, do visit Austin — I recommend downing Shiner Bocks
and Stubbs BBQ at a Johnny Cash-themed dive bar called the Mean
Eyed Cat — but skip South by Southwest unless you’re
getting paid for the pleasure.

Ilya Shapiro
is a senior contributor to The Federalist. He is a senior fellow in
Constitutional Studies at the Cato Institute and Editor-in-Chief of
the Cato Supreme Court Review.

When news reports broke that President Trump had agreed to meet
with North Korean dictator Kim Jong-Un, reactions in the United
States were sharply divided. Some pundits and politicians
expressed hope that a summit might defuse the nuclear crisis on the Korean
Peninsula. Others argued that Trump had fallen into a trap and made a foolish concession, giving the so-called
Democratic People’s Republic of Korea (DPRK) a diplomatic
triumph it had sought unsuccessfully for decades: a prestigious
bilateral meeting with a U.S. president. Members of the latter
faction breathed an audible sigh of relief when the White House
seemed to retreat from the prospect of a summit, returning to the
longstanding demand that the DPRK first take “concrete steps” to end its nuclear and
missile programs. Subsequent statements, though, appeared to put
the meeting back on track.

If Kim is serious about
disarming, Trump should offer a Korean peace treaty, diplomatic
recognition, and an end to economic sanctions.

Demanding North Korean concessions in advance reflects a
fundamental flaw in Washington’s entire diplomatic strategy
to this point regarding the Korea crisis. The U.S. approach
emphasizes sticks with little willingness to offer any meaningful
carrots. That strategy has proven utterly futile, and it is time to
adopt a radically different approach. The Trump administration
should offer the DPRK a “grand bargain” in exchange for
that country’s complete denuclearization. Such an offer is
the best (probably the only) chance of resolving an increasingly
dangerous situation. It also would be a definitive test of whether
Pyongyang would agree to resume a nonnuclear status under any
circumstances.

Thus far, the United States has given North Korea virtually no
incentive to abandon its nuclear and missile programs. The Trump
administration has continued the policy of its predecessors:
tightening unilateral economic sanctions and leading the effort to
impose harsher international sanctions every time the DPRK conducts
a new nuclear or missile test. That strategy has failed for nearly
a quarter century. Trump’s main innovation has been to
escalate the usual warnings and threats if Pyongyang does not
comply with Washington’s demands. His actions have increased
the danger of a miscalculation and the onset of a disastrous second
Korean War.

Achieving a grand bargain would require addressing North
Korea’s longstanding goals and demands. Some of the necessary
steps are low-cost, and include actions that the United States
should have taken years, if not decades, ago. Washington’s
initial offer needs to include:

A peace treaty to replace the 1953 armistice and
formally end the state of war on the Peninsula, along with an
agreement by the two Korean states for cross recognition;

U.S. diplomatic recognition of the DPRK, including the
establishment of embassies and consulates in both countries;

A willingness gradually to lift all economic sanctions, except
on goods having a direct military application;

Suspending the annual joint military exercises between U.S. and
South Korean forces.

More difficult concessions, but measures that would greatly
sweeten the offer, would include:

Addressing Pyongyang’s demand that the United States
withdraw all of its military forces from South Korea and phase-out
the alliance with Seoul;

Offering a written guarantee not use force against North Korea
as long as Pyongyang refrains from committing acts of
aggression.

U.S. negotiators would need to stress that these steps must
occur in stages to match Pyongyang’s measures to freeze and
then dismantle its nuclear and missile programs. The easiest
concessions (a peace treaty to end the original Korean War,
suspending the annual U.S.-South Korean military exercises, and
establishing diplomatic relations) should be implemented first. A
partial lifting of sanctions and the conclusion of a bilateral
nonaggression pact could follow relatively soon. All of those steps
are reversible if the DPRK reneged on commitments it made.

If Pyongyang proceeded toward abolition of its menacing
programs, the lifting of all remaining sanctions, along with the
phased withdrawal of U.S. forces from South Korea, should be the
penultimate step. Full and sustained implementation of North
Korea’s commitments (verified by international inspections)
could then culminate with the termination of the U.S. defense
treaty with South Korea. Given Soeul’s current and potential military capabilities, its alliance
with Washington is an obsolete obligation in any case, so that U.S.
“concession” is less dramatic than it might appear.

Prospects for success of a grand bargain offer admittedly are
slim. For a variety of reasons, the DPRK is unlikely to accept a grand bargain and
relinquish its nuclear weapons and missiles. Possession of a
credible nuclear deterrent enhances the regime’s prestige and
gives a small, poor country international influence that it
otherwise lacks. North Korea’s pathetic economy, increasingly
antiquated conventional military, and comic-opera political system
certainly provide no foundation for prestige or influence. North
Korean leaders also fear that without a nuclear deterrent, they
would be vulnerable to another forcible U.S. regime-change war.
They noted how Washington treated non-nuclear adversaries Serbia,
Afghanistan, and Iraq. They especially drew lessons from the
Western assisted overthrow of Libya’s Muammar Qaddafi, who
had given up his nuclear program in exchange for a promise from the
United States and its allies of normal relations.

Nevertheless, offering a grand bargain is worth a try. There is
always a slight chance that Kim would be willing to trade his nukes
and missiles for the extensive benefits that would flow to his
country. If Pyongyang turned down such a generous offer, we would
at least be certain that there is no chance whatsoever that North
Korea will be willing to return to nuclear virginity.

Such clarity would be valuable on multiple levels. China has
long prodded the United States to negotiate more seriously with the
North Korean government. A DPRK rejection of a proposed grand
bargain would make it clear to Chinese leaders that Kim’s
regime was incorrigible and that Beijing might need to take more
drastic steps to rein in its loose cannon ally before it triggers a
catastrophe on the Peninsula. U.S. policymakers also could
formulate policy based on the certainty that Pyongyang is
determined to be a nuclear power. Options would include relying on
a policy of U.S.-led deterrence to deal with a nuclear-armed DPRK,
urging Japan and South Korea to create
their own nuclear arsenals to deter and contain their
disruptive neighbor, or rolling the dice and incurring the grave
risks entailed in taking preventive military action.

One thing is clear. The current strategy of incremental
increases in sanctions, making periodic warnings that “all
options, including military action are on the table,” and
issuing a laundry list of demands without offering meaningful
concessions, is not working. Proposing a grand bargain would at
least bring clarity and might bring a peaceful conclusion to a
chronic crisis.

Here’s the paradox of immigration in America right now: The
economy is roaring, and wages are rising, yet 2017 was another year
of virtually no illegal border crossings. On average, each Border
Patrol agent apprehended just 16 people all year — one every
three weeks, tied for the lowest rate since World War II. This is
down from when Border Patrol agents apprehended an average of 261
crossers per agent in 1996.

Where have the illegal crossers gone? Newly released statistics
from the Department of State give a plausible answer: They haven’t
disappeared; they’ve become legal.

The 16 apprehensions per agent in the entire year was
significantly fewer than the 21 apprehensions that each agent was
making in a month throughout the 1990s. This figure actually
overstates the agency’s current workload because so many of today’s
“apprehensions” are, in fact, asylum seekers, families and
unaccompanied children who turn themselves in to the agents.

Changes in Mexico’s
economy, border security and demographics all played a role in the
steady reduction in illegal immigration. But one factor deserves
far more attention than it has received so far: Legal entries are
becoming the norm.

Of course, many factors affect the number of border crossers.
Changes in Mexico’s economy, border security and demographics all
played a role in the steady reduction in illegal immigration. But
one factor deserves far more attention than it has received so far:
Legal entries are becoming the norm.

From 1996 to 2017, the number of temporary visas issued to
seasonal workers on farms and other industries increased tenfold,
from 23,204 to 236,695. Even while Congress has done little on
other immigration issues, seasonal worker programs have gradually
expanded.

Entries using these visas have increased twice as fast as the
number of legal documents issued themselves, meaning that each
worker is crossing back and forth legally in a way that was much
less common in 1996. This is partly because an increasing share of
the visas are going to Mexican workers who can easily criss-cross
the border. In 1996, Mexicans made just 60 percent of all border
crossing entries. In 2016, that figure was 90 percent.

While Border Patrol has tripled its manpower and constructed a
system of more than 600 miles of fences and barriers during this
period, increased security is not the primary explanation for the
reduction in illegal immigration. We know this because it hasn’t
actually worked very well. According to the Department of Homeland
Security, the agency caught only half of the people who actually
attempted to evade entry in 2014 and 2015 (i.e., not the asylum
seekers or children). The best estimate by Princeton University’s
Douglas Massey finds that in the 1990s, 95 percent or more border
crossers eventually made it across after multiple attempts. All of
the increased enforcement decreased the success rate only to 75
percent. In other words, now that the economy has rebounded, many
more people ought to be attempting to sneak into the country.

Instead, potential undocumented border crossers have found their
way into the legal system. As the number entering legally has
increased, the Border Patrol’s job has become much easier. They
have effectively gained control over the border for the first time
since the early 1960s, and it is in an important way thanks to
these guest worker programs.

America has two guest worker programs for seasonal laborers, the
H-2A for agriculture and the H-2B for other industries, both
created in 1986. Although the H-2B program has a quota, employers
rarely reached it during the 1990s, and several times since then
Congress has temporarily increased the limit. The H-2A program has
no cap, which has allowed for a steady expansion over two
decades.

In the early 2000s, H-2Bs were 70 percent of the flow, but the
H-2A is now almost two-thirds. Farms have found creative ways to
reduce the costs and risks of the program. The North Carolina
Growers Association has pioneered a model whereby the association
sponsors the workers on behalf of the individual farms, allowing
businesses in the association to share the workers and share the
costs.

While anti-immigrant groups on the right and union-founded
groups on the left have fought the H-2 trends, a coalition of
moderate Democrats and Republicans has defended the programs,
citing solid evidence that they don’t displace U.S. workers and do
increase economic growth. President Trump’s businesses use both
programs, and he defended the practice in a GOP primary debate in
2016.

The trends paint a compelling picture of what would happen if
the administration does limit the flow: a lot more illegal
immigration.

It is not so much what Donald Trump did, but why he justified
doing it, that has got trade experts and US allies worried over the
past week.

In the grand scheme of things, the President’s decision to
impose tariffs of 25 per cent and 10 per cent on steel and
aluminium is not an economic catastrophe.

Sure, it amounts to mild self-harm for the US economy —
raising costs for downstream industries which, on net, could lead
to 146,000 fewer jobs and less productivity.

But there are many ruinous economic policies imposed by
governments around the world, and plenty of countries impose
tariffs. The EU alone has over 12,500, which have precisely the
same deleterious impacts.

Rather than fighting
producer-centric tariffs with producer-centric tariffs, it should
instead put EU consumers first.

No, it’s Trump’s claim that protection is needed for
national security reasons that has really riled everyone up —
especially EU leaders. Not only do they consider it nonsensical
(Canada is the number one exporter of these goods to the US) and
worry that Trump’s use of this justification risks similar
reasoning elsewhere in the world, but as the second biggest source
of US imports of both products combined, Brussels wants to protect
the economic interests of EU producers.

One can understand the grievance and sense of injustice. But so
far the EU’s petty producer-centric response risks making all
the talk of a “trade war” a self-fulfilling
prophecy.

Reacting to Trump’s announcement, EU Commission president
Jean-Claude Juncker said the EU could fight “stupid with
stupid”, targeting tariffs on US goods such as motorcycles,
jeans, and bourbon whiskey — all goods with major producers
in Republican areas.

The aim is to ramp up political pressure on Trump to abandon
them. But this seems a foolish, dangerous approach, both
economically and politically, living up to the stereotypical
anti-American caricature of continental Europeans, and misjudging
the President’s resolve.

From a rational economic perspective, both the US administration
and the EU should recognise that it is domestic consumers who
ultimately bear the majority of the cost of tariffs through higher
prices. If one focuses on this, rather than producer concerns, one
realises that a trade war entails both sides harming their own
economies to try to get the other to back down.

The economic conclusion is that the optimal response to a trade
partner imposing import tariffs is to keep your own trade free,
unless the threat of tariffs can be harnessed to deliver free trade
both ways.

In this case, Trump has made clear he is intent on steel and
aluminium tariffs come what may, as confirmed by his Treasury
secretary Steve Mnuchin and the resignation of his economic adviser
Gary Cohn.

If correct, highly politicised EU tariffs on US goods will
overwhelmingly hurt EU consumers, for no upside. In fact, if they
then become permanent, they would lower economic productivity by
insulating European producers from US competition.

This would be bad enough on its own, but it actually risks much
worse escalation. Trump has already said that if the EU goes ahead
with its retaliatory tariffs, the US government will ramp up
tariffs on European cars. A tariff here, a tariff there. We are, it
seems, just one or two badly judged diplomatic economic policy
decisions from a full-blown trade war.

At this juncture, the question of “who started it?”
will be irrelevant. We would all suffer.

Whereas in actual wars in the past we attempted to blockade
other countries from importing the goods and services they wanted
and needed, with rising tariffs we would be economically blockading
ourselves.

This would amount to destroying value for the sake of showing
displeasure at what, on the face of it, was an initial relatively
minor decision in an economic sense.

Though it sounds counterintuitive, and will stick in the craw of
those who think that Trump is undermining the rules-based trading
system, the better path is for the EU to choose to de-escalate the
situation by not retaliating.

Yes, work with allies to propose multilateral action to deal
with anti-competitive practices in the steel industry in
particular, but do not rile a protectionist President further with
politically motivated tariffs.

Indeed, if the EU really believes in the case for free trade, it
cannot ignore the logic of its own arguments. Rather than fighting
producer-centric tariffs with producer-centric tariffs, it should
instead put EU consumers first.

This would mean both abandoning planned retaliation, and also
reconsidering the host of barriers imposed through its own Common
External Tariff, which serve to raise prices and undermine the
dynamism of the EU economy.

Given the self-harming nature of trade wars, the best thing the
EU can do is lead by example, and choose peace.

Ryan Bourne
holds the R Evan Scharf Chair for the Public Understanding of
Economics at the Cato Institute.